Nurturing an Integrated Logistics and Transportation System for the APEC Economics September 6, 2006 Asst. Prof. Dong Keun Ryoo Korea Maritime University.

Nurturing an Integrated Logistics and

Transportation System for the APEC

Economics

September 6, 2006September 6, 2006

Asst. Prof. Dong Keun RyooAsst. Prof. Dong Keun RyooKorea Maritime UniversityKorea Maritime University

Republic of KOREARepublic of KOREA

2006/TPT-WG-28/IEG/01628th APEC Transportation Working Group Meeting

Vancouver, Canada5-8 September 2006

Nurturing an Integrated Logistics and Transportation System for the APEC Economies

Purpose: InformationSubmitted by: Republic of Korea

Nurturing an Integrated Logistics and Tra

nsportation System for the APEC Econo

mies

September 6, 2006September 6, 2006

Asst. Prof. Dong Keun RyooAsst. Prof. Dong Keun RyooKorea Maritime UniversityKorea Maritime University

Republic of KOREARepublic of KOREA

2006/TPT-WG-28/IEG/016

Contents

Background of the Project

Structure of the Project

Barriers & Areas in Building an Integrated Logistics Market

Research Methodology

Successful Logistics Integration

Future Work Schedule

Implications of the Survey

2006/TPT-WG-28/IEG/016

Background of the Project

APEC economies have been closely working together to realize the Bogor Goal, p

articularly in the maritime sector, by adopting and implementing APEC Common Pri

nciples to Shipping Policy.

Korean Government proposed a self-funded project of “The Study on the Costs of

Non-APEC in the Field of Logistics and Transportation” at the TPT-WG 26th meetin

g in Vladivostok, Russia.

The objective of the project is to overcome the obstacles from different levels of lo

gistics systems and to nurture a more integrated logistics and transportation system

for the APEC Economies, particularly in Northeast Asia.

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Structure of the Project

Contents

ResearchOrganizations

Schedule

• Identifying the costs of being separated non-APEC economies in the field of logistics, incorporating the door-to-door shipping concept• Developing strategic plans or basic directions for nurturing an integrated logistics and transportation system in Northeast Asia• Formulating action plans for realizing the vision of nurturing an integrated logistics system

• Korea Maritime Institute (KMI), 7 Korean universities & GLORI• Close cooperation with Chinese and Japanese universities

• The years of 2006 - 2008

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Barriers to Integration of a Logistics & Transportation System

Institutional barriers

Legal barriers

Customs barriers

Physical barriers

Technical barriers

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Building an Integrated Logistics & Transportation System

Infrastructure (Standardization)

- Logistics equipment and facility

- Logistics technology

- Logistics information network

Operation (Harmonization & Facilitation)

- Cabotage

- Customs procedure

- Mutual recognition agreement

Institution (Cooperative Organization)

- Joint conference on integrated transportation and logistics market

- Dispute settlement mechanism

(Jun, et al, 2005)

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Research Methodology

• Finding obstacles to integration of a logistics and transportation system in Northeast Asia

• Questionnaire Survey

• Computable General Equilibrium (CGE) Models

• Evaluating the economic effects of an integrated logistics and transportation system in Northeast Asia

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Questionnaire Survey

• Purpose – finding main obstacles to integration of a logistics and tra

nsportation system in Northeast Asia

• Questionnaire design and pilot survey by September 2006

• Survey carried out by October 2006

• Survey – Government Organization, Logistics Expert Group, Shipp

ers, Logistics & Transportation Companies etc.

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Key Survey Questions

• What is legal barriers to logistics and transport services?

•What is key barriers to customs procedures?

• What is international barriers relating to the entry into a logistics & tr

ansport market

• What is technical barriers to integration of a logistics and transportat

ion system

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Computable General Equilibrium (CGE) Models

• Beginning with the NAFTA negotiations, CGE models have become a widely used

tool for evaluating the effects of trade policy reforms in both regional and

multinational initiatives (U.S. International Trade Commission, 1992; Francois and

Shiells, 1994; Martin and Winters, 1995).

• While economic theory identifies how policy changes will affect economic

variables, it does not define the size of the impact and, in the case of RTA’s, leaves

the net effect ambiguous.

• CGE models provide an empirical foundation for policy analysis that can quantify

the magnitudes of the effects identified by theory, and suggest the likely net effect,

whether trade creating or trade diverting, of an RTA.(http://www.ers.usda.gov/publications)

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Requirements for Successful Logistics Integration

Successful integration of logistics and transportation system for APEC economies

is a lengthy process because of inherent economic, political and social obstacles

- Clearly identify winners and losers, and losers need to be compensated

- Maximizing the potential benefits of the integration of logistics and transportation

system while minimizing negative effects

- Joint research by the relevant countries is essential to provide the intellectual

guidance and policy supports to the integration process

- Initiating and reinforcing cooperation through institution arrangements

- Streamlining various administrative and technical procedures

(Zhang, 2005)

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Future Work Schedule

• Questionnaire survey carried out by October 2006

• Collecting macroeconomic logistics costs such as transportation costs, inventory carrying costs & administration costs in Korea, China & Japan by October 2006

• Preliminary survey findings by December 2006

• Make a presentation on survey findings of obstacles of integrating logistics and transportation system in Northeast Asia at 29th APEC TPT-WG in 2007

• Results of the economic effects of an integrated logistics and transportation system by December 2007

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Implications of the Survey

• Identification of barriers to integration of a logistics and transportation system

is important in analyzing the nature of the market and in policy-making

• Removing existing legal, institutional, technical and physical barriers promotes

freer and efficient cross-border movements of goods, people, and information

• Achieving the ultimate goal of an integrated logistics and transportation

system in APEC Economies

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